Kupnja stana u izgradnji – zaštita novca i provjera investitora

Buying a new-build apartment in Croatia before construction is complete allows you to choose a property early and, in some cases, customise its layout or finishes. However, it may also mean committing to pay a substantial part of the purchase price before the apartment is ready to occupy or your ownership can be registered.

What happens if the developer stops building? Will the bank release its mortgage after your payment? What if the finished apartment is smaller than agreed, or the handover date keeps moving?

Buyer protection should be agreed before the first payment: check the developer and the land, describe the future apartment precisely, link payments to verifiable conditions, and arrange safeguards for refunds and the acquisition of ownership without unaccepted encumbrances. A promise to return your money if something goes wrong is not enough to assess the security of the purchase.

This guide focuses on buying an apartment off-plan or during construction in Croatia. It explains Croatian terms such as kapara, uporabna dozvola and tabularna izjava so that English-speaking buyers can better understand the documents and protections being offered.

1. Check the developer and identify your seller

Before discussing a deposit, request the full legal name and Croatian personal identification number, known as the OIB, of the person or company that will sign the contract with you. The development’s marketing name, the estate agency’s name and the name of the site manager do not identify your contractual seller.

Use the Croatian Court Register (Sudski registar) to check the company’s details and its authorised representatives. Pay attention to how the company must be represented: the signatory needs the appropriate authority to enter into the particular agreement. The register is an official source of information and documents concerning registered entities.

For a financial assessment, review available annual financial statements through Fina’s public disclosure register, request current information on solvency, and check for public notices concerning pre-bankruptcy or bankruptcy proceedings. Annual accounts describe past periods and do not, by themselves, establish that the developer can finance the project today.

If the seller is a newly established company created for this development, ask how it is funded and what security it can provide. The track record of associated companies may be useful, but the central question is more specific: who owes you the contractual obligations, and what secures their performance?

2. Review the land, ownership and registered encumbrances

Legal due diligence on a new-build apartment starts with the land on which it is being built. Obtain a current Land Registry extract and compare it with the building permit and draft contract. Croatia’s official property-buying guidance also recommends checking ownership and building documentation.

In particular, establish:

• who is the registered landowner and on what legal basis the seller can dispose of the future apartment;
• whether there are mortgages, easements, entries concerning disputes or enforcement proceedings, or other restrictions;
• whether any pending application notices, known as plombe, appear and what applications they relate to;
• whether access to a public road or other public traffic area is legally secured;
• whether the development covers several cadastral parcels and requires further surveying or Land Registry steps.

If the seller does not own the land, examine the documents establishing its relationship with the owner and enabling the intended transfer of rights to you. A verbal assurance that ownership will be “sorted out before construction finishes” is not a substitute for this review.

For the wider due diligence process, read Buying Property in Croatia – Legal Due Diligence Before Signing a Contract.

3. Match the building permit and plans to the apartment you are buying

Request the building permit, evidence of its finality or enforceability, as applicable, and the relevant project documentation. Check whether the permit has been amended and whether the advertised apartment matches the approved design.

Compare the floor level, position, permitted use, layout, terraces, storage areas and parking spaces. Marketing images may show features that are neither contractually promised nor included in the relevant documentation.

Bring in an independent, appropriately qualified professional for technical questions. A lawyer reviews legal relationships and contractual obligations; the structure, workmanship and construction quality require technical expertise.

A building permit does not establish that an apartment is finished and may lawfully be occupied. As a general rule, Croatia’s Building Act links the commencement of use of a completed building to the issue of a use permit, the uporabna dozvola, subject to statutory exceptions. The contract should therefore distinguish completion of the works, obtaining the use permit and handing over the apartment. [Croatian Building Act, Article 94]

4. What should an off-plan preliminary purchase agreement include?

A preliminary agreement, known as a predugovor, creates an obligation to enter into the main agreement later. Its binding effect depends on the essential terms of the main agreement and the applicable form requirements. Do not treat it as a non-binding reservation. [Croatian Obligations Act, Article 268]

The contract and its schedules should address:

1. Identification of the apartment: unit reference, floor, position, floor plan, rooms and connection to the specific parcel and development.
2. Area and measurement: what is measured, which weighting factors apply, and how differences in the final area affect the price.
3. Associated spaces: the precise rights being acquired over a parking space, storage room, garden or terrace.
4. Construction and finishes: agreed materials, windows and doors, flooring, sanitary fittings, heating, cooling and other equipment.
5. Total purchase price: whether applicable VAT, utility connections, parking, storage and other agreed items are included.
6. Deadlines and documents: completion of works, the use permit, handover and the requirements for registering ownership.
7. Buyer safeguards: payment conditions, security, consequences of delay, termination and repayment of amounts paid.

Descriptions such as “premium finishes” or “materials chosen by the developer” leave too much open. Agree measurable specifications and a procedure for approving substitutions. Also address acceptable area variations and the consequences of significant changes to the layout or intended use.

5. How to protect advance payments on an off-plan property

A contractual right to a refund is different from security that helps you recover the money. Negotiations should therefore consider the payment schedule and suitable security arrangements together.

Link instalments to verified construction milestones

Consider agreeing that each instalment becomes due only after a clearly defined and documented stage of construction. The contract should say who confirms the milestone, what evidence is required and whether the buyer can arrange a check before paying.

Also negotiate an appropriate final balance payable once clearly specified conditions are met, such as delivery of agreed documentation, handover and provision of the documents required for registration. The allocation depends on the project, its financing and the negotiated terms. No single percentage makes every purchase safe.

Consider a bank guarantee for the repayment of advances

One possible safeguard is a bank guarantee covering repayment of amounts paid in advance. Before accepting it, review the wording, especially the amount covered, the conditions for making a demand, the required documents and the expiry date. Establish how the guarantee will be extended if construction is delayed.

Explore escrow or another suitable conditional holding arrangement

Where available, consider an escrow arrangement or another appropriate deposit arrangement with defined release conditions. The agreement should identify who holds the funds, when they may be released to the seller and when they must be returned to the buyer.

Calling an account a “separate project account” does not establish that the buyer is protected. The actual rules governing withdrawals and the legal treatment of the money if financial difficulties arise must be checked.

Assess other security arrangements

Depending on the project, it may be possible to negotiate a guarantee from a financially sound person or security over suitable assets. Its value should be assessed against the actual documents, existing encumbrances, priority and practical prospects of recovery.

Do not accept any security instrument solely because of its name. Have the document creating the protection reviewed before paying the amount it is intended to secure.

6. What if the bank has a mortgage over the development?

If the project is mortgaged, clarify with the seller and the bank, before paying, how your particular future apartment will be released from that mortgage. A general statement that the mortgage will be removed “when the development is finished” does not provide enough information to plan payments safely.

Request written bank documentation identifying the apartment to be released, the amount payable, the receiving account, the deadline and any additional conditions. Align the purchase agreement with those terms, including how a direct payment to the bank is credited against the purchase price.

Check whether the bank’s document is merely informative or contains a specific undertaking to issue the document needed for mortgage deletion. If the apartment is not yet separately registered, work out in advance how it will be identified and how the release will later be implemented.

7. Construction delays: set clear deadlines and consequences

Rather than relying on one “expected move-in date”, agree separate deadlines for completing the works, obtaining the use permit, handing over the apartment and supplying the documents needed to register ownership.

For any extension, define justified grounds, supporting evidence, notification duties and a final deadline after which the buyer may take the agreed contractual steps. Review carefully any clause allowing the developer to postpone performance unilaterally and without a limit.

Croatian law allows a contractual penalty to be agreed for delay in performing a non-monetary obligation, such as the agreed handover of an apartment. It cannot be agreed for a monetary obligation. If the buyer accepts late performance, the buyer must notify the other party without delay that the right to the contractual penalty is reserved. Liability and enforcement depend on the contract and the law. [Croatian Obligations Act, Articles 350–355]

Before giving notice of termination, check whether an additional period for performance must be allowed. Delay does not automatically terminate the contract in every situation. [Croatian Obligations Act, Articles 360–363]

8. Understand kapara, advance payments and mortgage financing

Identify the legal nature of every payment in the documents. Croatian kapara, often described in English as earnest money, and a straightforward advance payment, predujam, have different legal consequences. The wording of a bank transfer reference does not replace a review of the agreement. [Croatian Obligations Act, Articles 303–307]

If you are financing the purchase with a loan, align contractual payment deadlines with your lender’s approval and drawdown requirements before signing. Propose an express provision dealing with a refused loan: a deadline for the lender’s decision, the evidence required and what happens to money already paid. Do not rely on a verbal promise that the developer will “wait for the bank”.

Further information is available in our article on kapara refunds when buying property (in Croatian).

9. Handover and registration of ownership are separate steps

At handover, arrange an inspection with professional assistance where appropriate. Record visible defects, missing equipment, meter readings, keys and documents delivered in the handover report. Agree deadlines for rectifying defects and check whether the report asks you to confirm more than you have actually inspected or received.

Receiving the keys and paying the price do not, by themselves, mean that you are registered as the owner. Acquisition of ownership through a legal transaction requires an appropriate legal basis and Land Registry registration. For a future apartment, the conditions for establishing and registering ownership of that separate part of the property must be examined. [Croatian Ownership and Other Real Rights Act, Articles 72–73 and 119–120]

The contract should specify who obtains the necessary documents, by when and at whose cost. In particular, address the tabularna izjava, the seller’s declaration consenting to registration of the buyer’s ownership, and ensure the apartment description is consistent with its intended Land Registry description.

10. Off-plan property checklist: documents to request before paying

Before signing a reservation, preliminary agreement or purchase agreement, obtain the documents appropriate to the project’s stage:

1. the seller’s details and evidence of the signatory’s authority;
2. a current Land Registry extract and documents establishing the seller’s legal relationship with the land;
3. the building permit, amendments and relevant project documentation;
4. the floor plan, area description and construction and fit-out specification;
5. the draft agreement with all schedules, the price and payment timetable;
6. where relevant, the bank’s written conditions for releasing the apartment from its mortgage;
7. the proposed security documents for your payments;
8. a timetable for finishing construction, obtaining the required documents and registering ownership.

A refusal to supply documents, pressure to make an immediate substantial payment without security, or significant differences between the advertisement and the contract warrant further investigation before you commit.

FAQs about buying off-plan property in Croatia

How much should I pay before construction is complete?

Security does not depend solely on the percentage paid upfront. The construction stage, verified financing, encumbrances, contract terms and repayment security also matter. Before making a substantial payment, consider protection that can actually be called upon if the project stalls.

Is a refund clause in the purchase contract enough?

A risk assessment must also consider where the money for a refund would come from. A guarantee, suitable deposit arrangement or other concrete security should therefore be considered alongside the refund clause.

Can an apartment under construction be registered in my name immediately?

This cannot be confirmed without reviewing the Land Registry, the documents and the project’s stage. The availability and legal effect of a particular registration must be checked before promising that the buyer will have Land Registry protection as soon as the preliminary agreement is signed.

When should I instruct a Croatian property lawyer?

Ideally, the contract and supporting documents should be reviewed before the first payment. You can then negotiate safeguards and decide whether the identified risks are acceptable before committing funds.

Legal assistance with new-build purchases in Rijeka and the Kvarner region

When buying an apartment during construction, legal due diligence aims to align what you pay with what the seller must deliver and the documentation required to acquire ownership.

Law Office Andrej Bašović assists clients purchasing property in Rijeka, the Kvarner region and other parts of Croatia. Services include reviewing the Land Registry position and supporting documentation, and drafting and reviewing preliminary and purchase agreements. Learn more in Property Lawyer Croatia – Checks Before Buying.

Planning to buy an off-plan apartment in Croatia? Before paying kapara or another advance, send the draft agreement, developer details and available documents to andrej@odvjetnikbasovic.hr to discuss a legal review and protection of your interests.